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UK Industrial Output Has Biggest Monthly Gain Since 2012

June 8, 2016
Output climbed 2.0% across the pond in April, with factory production up 2.3%. Surprisingly, economic analysts had predicted no change.

British industrial production posted its biggest monthly gain in almost four years in April as manufacturing surged.

Output climbed 2% following a 0.3% rise in March, according to figures from the Office for National Statistics published Wednesday. Economists in a Bloomberg survey had predicted no change. Factories increased production by 2.3% in April, which was also the biggest gain since July 2012.

The figures will boost hopes for the second quarter after two consecutive quarters of falling industrial output. The data contrast with surveys showing lackluster activity as the referendum on European Union membership and ailing global growth take their toll.

“If this marks the beginning of stabilization or modest growth in the U.K. industrial sector, that would suggest some potential upside risk to gross domestic product growth in the second half of the year if the U.K. remains in the EU,” Kallum Pickering, an economist at Berenberg Bank in London, wrote in an email.

The main driver behind manufacturing in April was the pharmaceuticals sector, where output rose 8.6% — the largest increase since February 2014 — mainly on exports. Domestic sales boosted car production, lifting output of transport equipment by 4.7%. Overall, 10 out of 13 manufacturing sectors increased production in April.

There was also a 3.9% jump in gas and electricity production as colder-than-normal temperatures increased demand for energy. Oil and gas extraction fell 1.3%.

Industrial production rose 1.6% from a year earlier, while manufacturing increased 0.8%. In the latest three months, output climbed 0.7% and 0.1%, respectively.

On Tuesday, data showed German industrial production rebounded in April, while in Spain, it was unchanged from the previous month.

By Lucy Meakin

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